11 Jan - Nifty View

On Tuesday, Nifty finally gave a breakout from the 4690 to 4805 range, and closed near the highs of day of 4850. Today was a typical Trend Day, and those who got in early would have reaped the benefits. Traders who took Longs on the breakout above 4805, can now trail their stoploss to 4770 level, which should offer strong support in the event of any downmove from here. Although the trend remains up above 4780 now, Nifty has some pretty strong resistances at upper levels of 4875 and 4930-4960 range. Hence, it is better to be careful with Longs and have tight Stoplosses, to protect profits.

The Nifty option OI Charts are given below:
On the Options front, the day clearly belonged to the Bulls, as the Bears hardly did anything. The Bulls added a huge amount of nearly 50 lacs OI from 4600 PE to 4900 PE strikes. With one day's action, they have changed the face of Option Charts, which is now looking very Bullish, with 4800 as the new 50:50 level, and support coming at 4700 and below levels. 4900 and above are the resistances. However, important to note is that the Bears have not yet started to cover their positions. How these Bears react if and when Nifty reaches near 4900 levels, remains to be seen.

For tomorrow, immediate resistance for Nifty Spot comes at 4875/ and 4895 levels. Above this, Nifty should target its next strong resistance zone of 4930-4960. The Bears are expected to show up again if Nifty reaches near this zone of strong resistance, and try and push it towards its support levels. On the downside, support for Nifty Spot comes at 4820 levels, below which 4800/4770 will be the next support zone. As given earlier, till Nifty stays above 4770, consider the trend as up and Buy on Dips. Below 4770, the breakout can be treated as a failed breakout, and Positional Shorts can be initiated.

11 Jan - Nifty Spot resistance at 4875-4895-4930-4960. Support at 4820-4800-4770-4750 - www.niftypower.com

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